As COVID-19 settled in for the long-term, one of the major effects it had on the hospitality industry was to completely disrupt booking curves and pricing. Historical data was no longer useful or accurate, and Choice Hotels recognized that their franchisees needed a new tool to better forecast and understand what a customer was willing to pay.
“Currently, 80 percent of our overall business is booked within 72 hours,” notes Douglas Lisi, vice president of revenue management. “And in our economy hotels, 50 percent of our business is booked the same day.”
So, Choice Hotels decided in 2021 to launch its new revenue management system – ChoiceMAX – to help hoteliers optimize their pricing structure aimed at increasing revenue.
Prior to ChoiceMAX, franchisees were using two systems to manage their rates and inventory, Lisi explains. The first was SmartRates, a proprietary system from SaS based on their RMPOA all-purpose algorithm. That system managed the daily rate that was sent to ChoiceHotels.com, the OTAs and the call center and could only manage rates up to 90 days in advance. Hoteliers also used a product that was built in-house called Rate Center to manage their inventory up to 365 days in advance.
Logging into two systems is a cumbersome way to manage a business,” Lisi explains.
While Smart Rates was allowing hoteliers to manage rates and maximize revenue, the brand was receiving quite a bit of feedback from franchisees that they wanted a revenue optimization tool that could focus on the next 365 days, especially for its Cambria and extended stay brands that have bookings well beyond 90 days and needed a longer-term view. At the same time, it was hearing from its economy and mid-scale brands that they wanted rate pricing to adjust more than just once per day.
New Collaboration, New Product
To solve these challenges, Choice Hotels collaborated with IDeaS, a provider of revenue management and software serves, to create ChoiceMAX.